Sparks Fly at National Grid

LONDON -- National Grid , the international gas and electricity company responsible for delivering energy to the U.K. and the U.S., delivered a solid set of results for the year ended March 31, 2013.

Revenues rose 4% to £14.3 billion and operating profits increased 6% to £3.8 billion, with profits before tax rising 14% to £2.9 billion. The promising revenue growth was generated mainly in the U.K., with U.K. Transmission revenues increasing by 12% to £4.2 billion.

Basic earnings per share rose by 13% to 62.6 pence, and National Grid recommended a full-year dividend up 4% to 40.85 pence. A new dividend policy was also announced, which aims to grow the ordinary dividend at least in line with the rate of RPI inflation.

Commenting on the results, Steve Holliday, chief executive, said:

This has been an important year for National Grid with the successful conclusion of several major strategic priorities. During the year we secured significant regulatory outcomes, covering over 80% of our asset base, creating much greater clarity for our businesses. At the same time, we delivered a record operating profit and robust cash flow performance despite another year of significant storms in the U.S. As a result, we have built a strong platform from which to deliver organic growth and support our new dividend policy.

Capital investment for the year was £3.7 billion, 8.5% up on the previous year at constant currency reflecting the additional spending needed on the U.K. Electricity Transmission business. The spending helped to grow National Grid's assets by more than £2.7 billion during the year to a total of £35.1 billion.

Looking to the future, the U.K. transmission and distribution businesses are expecting to invest between £2 billion and £3 billion per year over the next five years, with further investments planned in the U.S.

Together with this investment in growth and the focus on continuing efficiency initiatives developed during the past few years, National Grid looks to be a potential investment to watch despite the less-than-effusive response today, with the Group's shares falling by 2% to 826 pence.

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